PTC plans to buy into generation projects

Soma Banerjee & Shubham Mukherjee, TNNSep 9, 2004, 02.11am IST

NEW DELHI: Power Trading Corporation (PTC) is planning to now move on to generation projects as well. The company's plans to take equity positions in those power generation projects with which it enters into long-term trading agreements.

For starters PTC, India's first power trading firm, is in talks with ONGC to take up equity in their upcoming power facilities. ONGC has entered into an agreement with ONGC by which PTC would trade all the power generated by the oil major.

ONGC, already has several captive power plants and is now moving on in a big way towards the gas to wire strategy.

PTC chairman T N Thakur said: "We are looking at projects with whom we have long term agreements. Since we would be buying and selling all the power generated from these plants, taking up a small equity could lend some comfort to the project."

PTC is in talks with at least 32 power companies across the country for which it is hoping to get into long term contracts. The mega power stations with whom PTC is signing long term contracts include Essar Power's 1500 mw plant , Vadinar Power Company's 1450 mw project, Chennai Power Generation Ltd's 1000 mw plant and Jaypee's 1000 mw hydel plant among others.

In these cases, the power developer would generate the power and sell the entire quantum to PTC who in turn would trade it to states in the deficit areas. The power sale agreement would thus be between PTC and the power generator.

Since the company has now adopted a policy to take up a small equity in generation projects, PTC would be open to negotiations wherever the generation company wants to rope in the trading partner. In ONGC's case, PTC would be the sole offtakers of the power generated by ONGC's captive plants and the new capacities it is planning at the gas head stations.